SHANGHAI, Aug. 4 (SMM) -- Prices of silicon metal have advanced recently. Excluding #2202, prices of other specification silicon metal were all up by RMB 100-200/mt, but transactions were not brisk.
SMM believes that the following factors are behind recent silicon metal price hike:
1. Producers report severe production halt on electricity rationing.
It was reported that power rationing did not ease in Hunan, Guizhou, Guangxi and Fujian, negatively affecting operating rates at silicon metal producers in these regions. In Hunan province, some producer halted production, and a few producers maintained production. In Guizhou province, production was not stable due to power rationing. In Guaingxi province, most silicon metal producers halted production as power rationing was severe. In Fujian province, silicon metal producers also cut production.
2. Silicon metal producers lifted offers, and their willingness to move goods waned.
Orders at silicon metal producers in Yunnan province have bee full, and supply of metallurgical grade silicon metal was relatively limited. Silicon metal producers, traders and downstream enterprises were optimistic towards silicon metal price outlook, so they hiked offers and reduced supply, waiting for prices to rise further.
3. Middlemen conducted speculation transactions of silicon metal.
4. Demand for silicon metal grew stably.
Although overseas demand did not improve, domestic downstream demand for silicon metal was stable. Current price hike of silicon metal stimulated downstream purchasers’ purchasing demand.
5. Price for aluminum alloy hiked, supporting silicon metal prices.
SMM believes that although the above factors pushed up silicon metal prices, future silicon metal prices shall be affected supply and demand balance. If power rationing eases and silicon metal output increases in the following weak, and if downstream demand remained stable, silicon prices will fall to certain extent by then. However, if output does not grow significantly, silicon metal prices may continue to rise stably in the following two days.